It’s not easy figuring out the UK’s housing market these days. While everyone seems to agree it’s not booming anymore, the evidence for what it’s actually doing remains contradictory.
Housing analyst Hometrack's latest monthly house price survey, released today, found no change in the cost of houses during September, with prices in London actually falling slightly. Though this was the first time house prices hadn't risen in 19 months, it was not unexpected. ‘The market has been cooling since May, but growth has now completely stalled,’ the report said.
On the same day, however, the Land Registry also released its latest figures, showing that 12 month house price growth rose to 8.4% in August. London prices led the charge, having increased by 21.6% over the year.
The reason for the difference is to be found in the methodology. Hometrack’s up-to-date report is based on a survey of 5,000 agents and surveyors, and attempts to account for differing levels of regional activity. The Land Registry’s figures are an index of houses actually sold, so reflect a more accurate picture, but the data is out of date.
As a result, the Land Registry’s high figures are still rooted in the housing boom of the last year, having gone up last month because August 2014 saw stronger growth than August 2013. Indeed, the Land Registry data shows prices only rose 1% in August itself, which is more than Hometrack’s 0.1% for the month, but not a world apart.
Confusion averted. Prices are stagnant now, but weren’t stagnant in the past. Which is a good thing, right?